Japanese Business in India - Strengthening Ties -

Transcription

1 Japan Foundation/CII Seminar Japanese Business in India - Strengthening Ties - Masanori Kondo masanori@icu.ac.jp

2 Outline of the presentation Features of Japanese business in India Progress in Japan-India business relationship Impacts of the recent financial crisis Major complaints of Japanese and Indians Towards better communications

3 Overview of Japanese Business in India

4 Salient features of Japanese business in India Third India boom in Japan since 1991 Concentration in auto and related industries Consider India as a country that is important in the long-run India s foremost importance for Japanese ODA

5 Recent progress in Japan-India relationship Prime minister s visit every year Cooperation in defense matters EPA/CEPA expected in 2009 DMIC/DFC and IIT Hyderabad plan

6 Recent progress in Japan-India business Increase in FDI and trade More knowledge accumulation on India Huge amount of portfolio investment Large-scale M&A by Japanese multinationals Increasing presence of NRI in Japan

7 Progress yet to be made Decreasing Japan s rank as a trade partner in India Not enough diversification in trade/investment Limited investment by Japanese SMEs Stagnant market share of Indian IT firms in Japan Very limited BPO by Indian companies in Japan Politically difficult to support India s nuclear Still limited people-to-people contact

8 Common factors behind successful FDI in India Commitment of top-level management Large-scale initial investment Intensive market survey and aggressive marketing Reasonably-priced quality products Delegating to capable Indian managers Not blaming or complaining against Indians

9 Impacts of the recent financial crisis Japanese firms freeze overseas investment plans Weakening Rupee and Japan s investment cost Most affected industry being automobile sector Coincidence with the terrorist attack in Mumbai Loss of Japanese investors in India s stock market Due diligence and trust matters in Japanese M&A Japan s takeover of American business in India

10 Towards better communications

11 Common complaints by Japanese India s poor infrastructure Bureaucracy and complicated tax scheme India s democracy compared to ASEAN/China Difficult human resource management Living environment in India

12 Common complaints by Indians Koreans are more aggressive than Japanese Keep sending delegations with no follow-up Too many general complaints against India Per-capita income and language skills Missing opportunities in infra business Limited career prospects to work for Japan

13 What Japan can say about business in India Japan s strength and India s strength doesn t match Japan has an export base in ASEAN/China already Japan s ASEAN business model is special High-quality products with high price tags Unlike India, Japanese business is bottom-up style Short-term personnel assessment in Japan Not many success stories in India are shared in Japan

14 On Japanese investment in India s infrastructure Japanese firms aren t used to run infrastructure Bidding in power projects is cost-based Portfolio investment for infrastructure Role of ODA when financial crisis affects PPP

15 On Japanese investment in India s infrastructure Japanese firms aren t used to run infrastructure Bidding in power projects is cost-based Portfolio investment for infrastructure Role of ODA when financial crisis affects PPP

16 Concluding remarks / Reference Need to sharing knowledge between India and Japan Effective people-to-people contact for better communications Be aware that both Japanese and Indians are proud people Actions and follow-up are the key Eminent Persons Group report in 2001 India-Japan Joint Study Group report in 2006 JFIR s 29th policy proposal in 2008